Is Gulf oil rebound at risk as US-Iran war enters uncharted waters?
A Gulf export rebound continues, but experts see ample room for escalation ahead.
Iran continues to claim attacks in the Gulf, from tankers to an unconfirmed strike on a US radar installation in Bahrain. Yet oil keeps flowing through the Strait of Hormuz as Gulf exports rebound as markets cautiously bet that the worst of the US-Israel-Iran war is over.
There is an uneasy stalemate in Hormuz as the conflict creeps toward the nine-month mark. Weeks ago, Middle East governments and investors were bracing for a possible escalation after the Trump administration signaled it may resume strikes on Iran following the Nov. 3 US midterm elections.
Although the US military has launched strikes on Iran’s Qeshm Island in the Strait of Hormuz this month, the feared US offensive has yet to materialize, nearly two weeks after Democrats romped to a historic election victory. Instead, Washington's rhetoric has shifted toward de-escalation, raising hopes that a diplomatic opening could emerge. Any such optimism, however, may prove short-lived amid signs the current status quo is unsustainable.
Richard Bronze, head of geopolitics at Energy Aspects, told Al-Monitor, "The stalemate can persist for a while but is unlikely to be durable in the long term given the pressure on both sides, although there is no firm timeline for when it might break down.”
